Tenaris, a global steel pipe manufacturer, entered into the SEC's first-ever Deferred Prosecution Agreement for violating the Foreign Corrupt Practices Act by bribing Uzbekistan government officials. Under the terms of the agreement, Tenaris must pay $5.4 million in disgorgement and interest for profits resulting from contracts awarded due to the bribery. The SEC credited Tenaris for promptly reporting the violations internally, conducting a thorough investigation, fully cooperating with the SEC, enhancing anti-corruption procedures, and increasing training.

1. Tenaris to Pay $5.4 Million in SEC's First-Ever Deferred Prosecution Agreement
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Tenaris to Pay $5.4 Million in SEC's First-Ever Deferred
Prosecution Agreement
FOR IMMEDIATE RELEASE
2011-112
Washington, D.C., May 17, 2011 – The Securities and Exchange
Commission today entered into a Deferred Prosecution Agreement (DPA)
with Tenaris S.A. in its first-ever use of the approach to facilitate and
reward cooperation in SEC investigations.
Additional Materials
Deferred Prosecution Agreement
The agreement with Tenaris involves allegations that the global
manufacturer of steel pipe products violated the Foreign Corrupt Practices
Act (FCPA) by bribing Uzbekistan government officials during a bidding
process to supply pipelines for transporting oil and natural gas. The SEC
alleges that Tenaris made almost $5 million in profits when it was
subsequently awarded several contracts by the Uzbekistan government.
Under the terms of the DPA, Tenaris must pay $5.4 million in disgorgement
and prejudgment interest.
Tenaris is the first company to enter into a DPA with the SEC, an approach
announced last year to encourage individuals and companies to provide
information about misconduct and assist with an SEC investigation. When
Tenaris conducted a thorough, worldwide internal review of its operations
and controls, it discovered FCPA violations by personnel in Uzbekistan and
informed the SEC. In response to its findings, Tenaris reviewed its controls
and compliance measures and significantly enhanced its anti-corruption
policies and practices. Tenaris has agreed to cooperate further with the SEC,
Justice Department, and any other law enforcement agency in connection
with this case. Tenaris also agreed to pay a $3.5 million criminal penalty in
a Non-Prosecution Agreement announced today by the Justice Department.
“The Tenaris foreign bribery scheme was unacceptable and unlawful, but the
company’s response demonstrated high levels of corporate accountability
and cooperation,” said Robert Khuzami, Director of the SEC’s Division of
Enforcement. “The company’s immediate self-reporting, thorough internal
investigation, full cooperation with SEC staff, enhanced anti-corruption
procedures, and enhanced training made it an appropriate candidate for the
Enforcement Division’s first Deferred Prosecution Agreement. Effective
enforcement of the securities laws includes acknowledging and providing
credit to those who fully and completely support our investigations and who
display an exemplary commitment to compliance, cooperation, and
remediation.”?
Cheryl Scarboro, Chief of the SEC Enforcement Division’s FCPA Unit, added,
“Tenaris’s conduct was clearly in violation of the FCPA. The company’s
employees bribed government officials in Uzbekistan to obtain government
contracts. But when Tenaris discovered the illegal conduct, it took
noteworthy steps to address the violations and significantly enhance its
anti-corruption policies and practices to remediate weaknesses in its internal
http://www.sec.gov/news/press/2011/2011-112.htm[28-12-2011 20:02:14]

2. Tenaris to Pay $5.4 Million in SEC's First-Ever Deferred Prosecution Agreement
controls.”
Tenaris is incorporated in Luxembourg and its American Depositary Receipts
(TS) are listed on the New York Stock Exchange. According to the DPA, the
SEC alleges that Tenaris bid on a series of contracts in 2006 and 2007 and
bribed Uzbekistan officials to gain access to confidential bids by
competitors. Tenaris used the information to revise its own bids, and as a
result was awarded several contracts by the Uzbekistan government.
Under the terms of the DPA, the SEC will refrain from prosecuting the
company in a civil action for its violations if Tenaris complies with certain
undertakings. Among other things, Tenaris has agreed to enhance its
policies, procedures, and controls to strengthen compliance with the FCPA
and anti-corruption practices. Tenaris will implement due diligence
requirements related to the retention and payment of agents, provide
detailed training on the FCPA and other anti-corruption laws, require
certification of compliance with anti-corruption policies, and notify the SEC
of any complaints, charges, or convictions against Tenaris or its employees
related to violations of any anti-bribery or securities laws. Tenaris has
agreed to continue to fully cooperate with the SEC in its investigation.
The SEC’s investigation was conducted by Karen L. Martinez, Assistant
Director of the Salt Lake Regional Office, and William B. McKean of the
Enforcement Division’s FCPA Unit. The SEC acknowledges the assistance of
the Department of Justice’s Fraud Section and the Federal Bureau of
Investigation in this case. The SEC’s investigation is continuing.
# # #
For more information about this enforcement action, contact:
Cheryl Scarboro
Chief, SEC Enforcement Division’s FCPA Unit
202-551-4403
For general questions about Deferred Prosecution Agreements, contact:
Robert Khuzami
Director, SEC Division of Enforcement
(202) 551-4894
http://www.sec.gov/news/press/2011/2011-112.htm
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